Water damage. I upgraded floor and paid add'l $ than what the ins. co. paid. Would the total cost of the new floor basis for depreciation?

[Cheerful1]

I have a rental and have a question. New floors were replaced due to water damage. I upgraded floor and paid additional money than what the insurance company paid. 

For example I paid $5000 more for more flooring.  Insurance paid $20000

Is floor basis for depreciation now $25000 or $5000

If $25000 is insurance portion of $20000 income that is reported somewhere?

1) Would the cost of the new floor basis be the total paid on the floor or just my portion? 

2) If total do I put insurance company payment as income somewhere?

[DDollar · Accepted solution]

You basis in the new Floor, according to your example would be $5,000.  The $20,000 that insurance paid does not need to be reported, unless the insurance company issued you a Form 1099-MISC.  In this case, I would report it as income and add an expense of $20,000 to offset it - net Zero.

[Cheerful1]

Thanks @TurboTaxDavidD

[DDollar]

Your're welcome. Thanks for using TurboTax!!